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The former chairman of Tasmanian pulp mill company Gunns Ltd, John Gay, today stunned the corporate world by pleading guilty to insider trading.
He will be sentenced on August 13 and could potentially face time in prison. The offence carries a maximum sentence of up to five years.
Penalties for offending occurred when the maximum penalty for insider trading was 5 years’ jail and a fine of up to $220,000. This will be the penalty that applies in this case, though the penalty has now increased to up to 10 years’ jail and a fine of up to $765,000.
A jury was due to be empanelled for the trial this morning but Gay’s barrister told the court that he had decided to plead guilty.
He was accused by ASIC of offloading more than 3 million shares in his company, knowing that the company was about to report a 100 per cent drop in profits.
He pocketed around $3 million as a result of the sale, and also held on to around another 8 million shares.
His lawyer said Gay was pleading guilty on the basis he “ought to have known” that a report he had contained price sensitive information.
ASIC said today it had prosecuted 29 cases of insider trading since 2009, with 19 successful and four more people awaiting trial, while five had failed.
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